S.F. 453 DIVISION I 1 TRANSPORTATION 2 Section 1. Section 285.2, subsection 1, paragraph a, Code 3 2025, is amended to read as follows: 4 a. (1) Boards Except as provided in subparagraph (2), 5 boards of directors of school districts shall be required to 6 provide transportation services to nonpublic school pupils 7 as provided in section 285.1 when the general assembly 8 appropriates funds to the department of education for the 9 payment of claims for transportation costs submitted by the 10 school district. 11 (2) Boards of directors of school districts shall not 12 be required to provide transportation services to nonpublic 13 school pupils of nonpublic schools that accept payments from 14 individual accounts under section 257.11B. 15 Sec. 2. Section 285.3, subsection 1, Code 2025, is amended 16 to read as follows: 17 1. a. A Except as provided in paragraph “b” , a parent or 18 legal guardian of a student attending an accredited nonpublic 19 school, who furnishes transportation for the student pursuant 20 to section 285.1, subsection 17 , paragraph “c” , and who meets 21 the requirements of subsection 2 of this section , is entitled 22 to reimbursement equal to an amount calculated under the 23 provisions of section 285.1, subsection 3 . In addition, a 24 parent or guardian who transports one or more family members 25 more than four miles to their nonpublic school of attendance 26 shall be entitled to one supplemental mileage payment per 27 family, per claim period, equal to thirteen percent of the 28 parental reimbursement for the claim period rounded to the 29 nearest whole dollar. 30 b. A parent or guardian of a student attending a nonpublic 31 school, who furnishes transportation described in paragraph 32 “a” , is not entitled to reimbursement or a supplemental mileage 33 payment under paragraph “a” , if the parent or guardian uses 34 funds from a pupil’s individual account under section 257.11B 35 -1- LSB 2568XS (4) 91 jm/md 1/ 8

S.F. 453 to make a payment to a nonpublic school. 1 Sec. 3. APPLICABILITY. This division of this Act applies to 2 school budget years beginning on or after July 1, 2025. 3 DIVISION II 4 SCHOOL AID FORMULA FOR NONPUBLIC SCHOOL SHARED TIME 5 Sec. 4. Section 257.6, subsection 1, paragraph a, 6 subparagraph (3), Code 2025, is amended to read as follows: 7 (3) Shared-time and part-time pupils of school age enrolled 8 in public schools within the district, irrespective of the 9 districts in which the pupils reside, in the proportion that 10 the time for which they are enrolled or receive instruction for 11 the school year is to the time that full-time pupils carrying 12 a normal course schedule, at the same grade level, in the 13 same school district, for the same school year, are enrolled 14 and receive instruction. Tuition charges to the parent or 15 guardian of a shared-time or part-time nonresident pupil shall 16 be reduced by the amount of any increased state aid received 17 by the district by the counting of the pupil unless the pupil 18 is also enrolled in a nonpublic school that accepts funds from 19 individual accounts under section 257.11B . This subparagraph 20 applies to pupils enrolled in grades nine through twelve under 21 section 299A.8 and to pupils from accredited nonpublic schools 22 accessing classes or services on the accredited nonpublic 23 school premises under section 256.12 or on the school district 24 site, but excludes accredited nonpublic school pupils receiving 25 classes or services funded entirely by federal grants or 26 allocations. 27 DIVISION III 28 AREA EDUCATION AGENCIES MEDIA AND EDUCATION COSTS FOR NONPUBLIC 29 STUDENTS 30 Sec. 5. Section 257.37, subsection 4, Code 2025, is amended 31 to read as follows: 32 4. “Enrollment served” means the basic enrollment of all 33 school districts within the boundaries of the area education 34 agency plus the number of nonpublic school pupils served by 35 -2- LSB 2568XS (4) 91 jm/md 2/ 8

S.F. 453 the area education agency with media services or educational 1 services, as applicable, other than nonpublic school pupils of 2 nonpublic schools that accept funds from individual accounts 3 under section 257.11B, and except that if a nonpublic school 4 pupil or a pupil attending another district under a whole grade 5 sharing agreement or open enrollment receives services through 6 an area other than the area of the pupil’s residence, the 7 pupil shall be deemed to be served by the area of the pupil’s 8 residence, which shall by contractual arrangement reimburse 9 the area through which the pupil actually receives services. 10 Each school district shall include in the enrollment report 11 submitted pursuant to section 257.6, subsection 1 , the number 12 of nonpublic school pupils within each school district for 13 media and educational services served by the area. However, 14 the school district shall not include in the enrollment report 15 nonpublic school pupils receiving classes or services funded 16 entirely by federal grants or allocations. 17 Sec. 6. Section 257.37, subsection 5, Code 2025, is amended 18 to read as follows: 19 5. a. If an area education agency does not serve nonpublic 20 school pupils who attend nonpublic schools that do not accept 21 funds from individual accounts under section 257.11B in a 22 manner comparable to services provided public school pupils 23 for media and educational services, as determined by the 24 state board of education, the state board shall instruct the 25 department of management to reduce the funds for media services 26 and educational services within the area one time by an amount 27 to compensate for such reduced services. The media services 28 budget shall be reduced by an amount equal to the product of 29 the cost per pupil in basic enrollment for the budget year for 30 media services times the difference between the enrollment 31 served and the basic enrollment recorded for the area. The 32 educational services budget shall be reduced by an amount equal 33 to the product of the cost per pupil in basic enrollment for 34 the budget year for educational services times the difference 35 -3- LSB 2568XS (4) 91 jm/md 3/ 8

S.F. 453 between the enrollment served and the basic enrollment recorded 1 for the area. 2 b. This subsection applies only to media and educational 3 services which cannot be diverted for religious purposes. 4 c. Notwithstanding this subsection , an area education agency 5 shall distribute to nonpublic schools that do not accept funds 6 from individual accounts under section 257.11B media materials 7 purchased wholly or partially with federal funds in a manner 8 comparable to the distribution of such media materials to 9 public schools as determined by the director of the department 10 of education. 11 Sec. 7. Section 273.2, subsection 3, paragraph a, Code 2025, 12 is amended to read as follows: 13 a. The area education agency shall furnish educational 14 services and programs as provided in section 273.1 , this 15 section , sections 273.3 through 273.8 , and chapter 256B to 16 pupils enrolled in public or nonpublic schools which are on the 17 list of accredited schools pursuant to section 256.11 , which 18 request to receive such services , except to pupils as provided 19 in subsection 15 . The programs and services provided shall be 20 at least commensurate with programs and services existing on 21 July 1, 1974. The programs and services provided to pupils 22 enrolled in nonpublic schools shall be comparable to programs 23 and services provided to pupils enrolled in public schools 24 within constitutional guidelines. 25 Sec. 8. Section 273.2, subsection 3, paragraph b, 26 unnumbered paragraph 1, Code 2025, is amended to read as 27 follows: 28 The Except nonpublic schools that accept payments from 29 parents or guardians with an account under section 257.11B, the 30 area education agency may furnish evidence-based professional 31 development services to public or nonpublic schools which are 32 on the list of accredited schools pursuant to section 256.11 if 33 any of the following requirements are satisfied: 34 Sec. 9. Section 273.2, subsection 5, paragraph a, Code 2025, 35 -4- LSB 2568XS (4) 91 jm/md 4/ 8

S.F. 453 is amended to read as follows: 1 a. The area education agency may furnish services under 2 subsection 3 or 4 to public or nonpublic schools located within 3 its boundaries, or within the boundaries of a contiguous area 4 education agency, which are on the list of accredited schools 5 pursuant to section 256.11 , except for nonpublic schools that 6 accept payments from accounts under section 257.11B . 7 Sec. 10. Section 273.2, subsection 6, paragraph d, Code 8 2025, is amended to read as follows: 9 d. Auxiliary services for nonpublic school pupils as 10 provided in section 256.12 . However, if auxiliary services are 11 provided their funding shall be based on the type of service 12 provided , except if the parent or guardian of a nonpublic 13 school pupil uses funds from a pupil’s individual account under 14 section 257.11B to make a payment to an accredited nonpublic 15 school, no funding shall be provided to the nonpublic school 16 pupil . 17 Sec. 11. Section 273.2, Code 2025, is amended by adding the 18 following new subsection: 19 NEW SUBSECTION . 15. A nonpublic school pupil whose parent 20 or guardian uses funds from the pupil’s individual account 21 under section 257.11B to make a payment to an accredited 22 nonpublic school, the nonpublic school pupil shall not be 23 eligible to use educational services and programs provided 24 under this section, unless the pupil pays the area education 25 agency directly for the services and programs. 26 DIVISION IV 27 SCHOOL TUITION ORGANIZATION TAX CREDIT 28 Sec. 12. Section 422.11S, subsection 2, Code 2025, is 29 amended by adding the following new paragraph: 30 NEW PARAGRAPH . d. The contribution is used by a qualified 31 school that does not accept payments from a parent or guardian 32 using funds from a pupil’s individual account under section 33 257.11B. 34 Sec. 13. APPLICABILITY. This division of this Act applies 35 -5- LSB 2568XS (4) 91 jm/md 5/ 8

S.F. 453 to contributions made to a school tuition organization on or 1 after July 1, 2025. 2 DIVISION V 3 SCHOOL TUITION AND TEXTBOOK TAX CREDIT 4 Sec. 14. Section 422.12, subsection 2, paragraph b, Code 5 2025, is amended to read as follows: 6 b. A tuition credit equal to twenty-five percent of the 7 first two thousand dollars which the taxpayer has paid to 8 others for each dependent in grades kindergarten through 9 twelve, for tuition and textbooks of each dependent who 10 is receiving private instruction or who is attending an 11 elementary or secondary school situated in Iowa, which school 12 is accredited or approved under section 256.11 , which is not 13 operated for profit, which is not accepting payments from 14 a parent or guardian using funds from a pupil’s individual 15 account under section 257.11B, and which adheres to the 16 provisions of the federal Civil Rights Act of 1964 and chapter 17 216 . Notwithstanding any other provision, all other credits 18 allowed under this subsection shall be deducted before the 19 tuition credit under this paragraph. The department, when 20 conducting an audit of a taxpayer’s return, shall also audit 21 the tuition tax credit portion of the tax return. 22 Sec. 15. APPLICABILITY. This division of this Act applies 23 to tuition and textbooks purchased for school budget years 24 beginning on or after July 1, 2025. 25 DIVISION VI 26 CONCURRENT ENROLLMENT 27 Sec. 16. Section 261E.2, Code 2025, is amended by adding the 28 following new subsection: 29 NEW SUBSECTION . 01. “Accredited nonpublic school” means a 30 nonpublic school that does not accept payments from a parent or 31 guardian using funds from a pupil’s individual account under 32 section 257.11B. 33 EXPLANATION 34 The inclusion of this explanation does not constitute agreement with 35 -6- LSB 2568XS (4) 91 jm/md 6/ 8

S.F. 453 the explanation’s substance by the members of the general assembly. 1 This bill relates to public school funding and education 2 savings accounts (ESAs). 3 DIVISION I —— TRANSPORTATION. The bill strikes the 4 requirement that the board of directors of a school district 5 provide transportation services to nonpublic school pupils 6 when the general assembly appropriates funds to the department 7 of education for the payment of claims for transportation 8 costs, if the nonpublic school accepts payments using funds 9 from an ESA. The bill also specifies parents and guardians of 10 nonpublic school students are not entitled to reimbursement for 11 transportation costs or supplemental mileage payments, if the 12 parent or guardian utilizes an ESA for payments to a nonpublic 13 school. 14 The division applies to school budget years beginning on or 15 after July 1, 2025. 16 DIVISION II —— SCHOOL AID FORMULA FOR NONPUBLIC SCHOOL 17 SHARED TIME. Under the bill, for shared-time and part-time 18 pupils enrolled in a school district, the tuition charged to 19 the parent or guardian by the school district is reduced by the 20 amount of any increased state aid received by the district by 21 counting the pupil in enrollment, unless the pupil attends a 22 nonpublic school that accepts payments from accounts under Code 23 section 257.11B. 24 DIVISION III —— AREA EDUCATION AGENCIES MEDIA AND EDUCATION 25 COSTS FOR NONPUBLIC STUDENTS. A nonpublic school pupil who 26 attends a nonpublic school that accepts payments from accounts 27 under Code section 257.11B shall not be considered part of 28 the enrollment for purposes of “enrollment served” under Code 29 section 257.37. 30 The bill strikes provisions requiring area education 31 agencies to provide educational, programming, and professional 32 services to nonpublic schools that accept payments from parents 33 or guardians using an ESA and to the pupils that are the 34 subject of such payments. 35 -7- LSB 2568XS (4) 91 jm/md 7/ 8

S.F. 453 DIVISION IV —— SCHOOL TUITION ORGANIZATION TAX CREDIT —— 1 REPEAL. The bill provides that contributions made to a student 2 tuition organization (STO) that are used by a qualified school 3 that accepts payments from a parent using funds from an ESA 4 are not eligible to receive the STO tax credit. The provision 5 applies to contributions made to a school tuition organization 6 on or after July 1, 2025. 7 DIVISION V —— SCHOOL TUITION AND TEXTBOOK TAX CREDIT. The 8 bill modifies the tuition and textbook tax credit in Code 9 section 422.12(b) that is equal to 25 percent of the first 10 $2,000 the taxpayer has paid others for tuition and textbooks 11 for each dependent receiving private instruction at an 12 accredited nonpublic school that does not accept payments from 13 ESA funds. 14 The division applies to tuition and textbooks purchased for 15 school budget years beginning on or after July 1, 2025. 16 DIVISION VI —— CONCURRENT ENROLLMENT. The bill defines 17 “accredited nonpublic school” for purposes of Code chapter 261E 18 (senior year plus program) to mean a nonpublic school that does 19 not accept payments from a parent or guardian using an ESA. By 20 defining “accredited nonpublic school” in Code chapter 261E 21 in this manner, a pupil who attends a nonpublic school that 22 accepts ESA funds is not eligible for the senior year plus 23 program under Code chapter 261E. 24 -8- LSB 2568XS (4) 91 jm/md 8/ 8